Employee Pension Scheme came into force on 16th November 1995. This scheme applies to all the employees of factories and other establishments to which the 1952 Miscellaneous Provisions Act and Employees Provident funds applies.
The pension amount in PF depends on the pensionable salary and the pensionable service of the member.
a) Pensionable Salary
The average monthly salary withdrawn by the member in the last 12 months before exiting the Employee Pension Scheme in India is the pensionable salary.
If there are non-contributory periods in the last 12 months of the employment, the non-contributory days in the month will not be considered and the benefit of those days would be given to the employee.
For ex-If the salary of the person is ₹ 15,000, and he joins the organization on 3rd of the month, then the salary for that month would be ₹ 14,000 for 28 days (₹ 500 per day less for two days). However, the consideration for monthly EPS salary would be for 30 days, i.e. ₹ 15,000. So, the amount which has to be deposited in the EPS account of the employee would be 8.33% of ₹ 15000 = ₹ 1250
The maximum pensionable salary has been increased from ₹ 6500 to ₹ 15,000 every month.
b) Pensionable Service
Pensionable Service is the actual service period of an employee or member.
The pensionable Service Period is calculated by adding all the service rendered by the member to different employers as well.
Every time an employee switching jobs needs to submit EPS Scheme certificate issued to him to new employer.
The employee has to get the EPS Scheme Certificate issued and submit it to the new employer every time he switches a job.
It is important to note that the employee gets a bonus of 2 years after completing 20 years of service.
Before completing the service period of 10 years If the member withdraws the EPS corpus and joins another company, he will have to start afresh for contributing to the basic EPS account
and he/she has to start fresh as the service period will also be set as zero at the start.
The consideration of pensionable service period is on a 6 months basis. The minimum pensionable service period is 6 months. The pensionable service period considered is 8 years,if the service period is 8 years 2 months, However, the pensionable service period is taken as 9 years,if the service duration is 8 years and 10 months,
There are different types of pensions under EPS 95 pension scheme such as pensions for widows, children, and orphans which supports the family members of the pension.
Under Widow pension or Vridha pension the widow of the member eligible for a pension. The pension amount will be payable until the death of the widow or her remarriage. In case of more than one widow, the pension amount will be payable to the eldest widow.
The surviving children of the family in addition to monthly widow Pension is eligible for child pension in case of the members death.. The monthly pension will be paid till the child attains the age of 25 years. The payable amount is 25% of the widow pension and to a maximum of two children amount can be paid.
Children of the member will be entitled to get the monthly orphan pension of 75% of the value of monthly widow pension in case the member dies and has no surviving widow, his. From oldest to youngest two surviving children will be benefited under the orphan pension.
A member of the EPFO can withdraw an early pension if he has completed 10 years of service and has reached the age of 50 years but is less than 58 years. In this case, age is less than 58 years. at a rate of 4% for every year the pension amount is slashed.
In case the member decides to withdraw the monthly reduced pension at the age of 54 years, he will get the pension at a rate of 84% (100% – 4 x4) of the original pension amount.
In order to avail the benefits of employee pension scheme the following form needs to be filled by the member. Or the survivors of EPFO Member.
|EPS Form||Applicant||Purpose of the Form|
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